Aggregate Consumer Behavior and Household Equivalence Scales

Abstract

Abstract This article presents estimates of household equivalence scales, broken down by demographic characteristics, of U.S. households. Separate estimates are given by family size, age of head, region, race, and urban versus rural residence. Commodity-specific scales are presented for five separate commodity groups—energy, food, consumer goods, capital services, and other services. The estimates are obtained from an econometric model of aggregate consumer behavior. The parameters of this model are estimated by combining aggregate time series and individual cross-section data. KEY WORDS: Translog indirect utility functionExact aggregationNonlinear three-stage least squaresNonlinear programmingPersonal consumption expenditures